Infrastructure

Infrastructure is a unique asset class with a distinct set of financial risks. Infrastructure assets range from hospitals to communications networks and energy generation and distribution. They often involve long-term outlooks, large-scale developments, are project-based rather than company-focused, and have a changing risk profile depending on the stage of their development. These investments often require considerable fundraising prior to planning and construction and have potentially significant positive or negative impact on the environment and society as well as being impacted by environmental, social and governance (ESG) issues.

There are many areas in which investors can develop a responsible investment approach with the support of the PRI and other signatories. Aside from simply mitigating the downside risks from ESG issues, investors may wish to:

Create a more robust due diligence process through the integration of ESG issues

Train internal stakeholders on long term ESG trends

Increase the potential value of an asset prior to exit through enhanced ESG management

About the work stream

Formally established in August 2011, the work stream aims to support signatories to develop responsible investment policies and processes in this asset class. While there is a strong business case for integrating ESG considerations into portfolio selection, due diligence, monitoring and management of infrastructure assets; further work is needed to disseminate these ideas among internal and external stakeholders. These ideas must also be driven right through the value chain from asset owner to developer. The work stream aims to assist investors in this process and by making best practice resources available to them in their specific fields.

Case studies

Online discussion group

The PRI has established a LinkedIn discussion group for investors interested in infrastructure and responsible investment. This is an informal forum where members can exchange information about specific areas of infrastructure investment and start new discussions on topics that interest them. The group is private so please contact Fong Yee Chan to receive an invitation to join.